Software & ERP train wrecks $1 million - $10 million

Software failures $1 million and $10 million

Oracle sued by Pennsylvania-based contractor over failed ERP

Software giant Oracle was sued by Worth & Company, a Pennsylvania-based mechanical contractor, over a failed ERP deal. The lawsuit alleges Oracle breached its contractual obligations and fraudulently misrepresented the suitability of its software. "Worth paid more than $4.5m to purchase and implement a non-functioning Oracle ERP product."

Worth had hired EDREi Solutions, a now-defunct IT systems integrator, to implement Oracle's E-Business Suite Applications and its Cloud Services. After the implementation schedule had slipped 18 months, when the time to go live arrived there were still major problems.

The company then ended the consulting services of EDREi and hired Monument Data Solutions, another IT integrator. Monument spent about a year rewriting applications, debugging and trying to resolve various other problems but it wasn't enough. Although there was no catastrophic failure, the incremental failures of Oracle's system ultimately led Worth to abandon the project and choose another ERP vendor. Now the Pennsylvania-based contractor wants a refund and damages.

Beverage distributor Major Brands is suing Epicor, alleging the ERP software vendor failed to deliver a satisfactory system after years of effort and significant cost overruns, and then offered a solution that would force the company to install a new version that hadn't yet been completed, pushing back the original "go-live" date by four years.

Major Brands paid Epicor an initial fee of about US$500,000 for software license and support and roughly $670,000 for implementation services. The software was installed on Major Brands' hardware but "problems with operations, implementation and training" began almost at once, the complaint states. Epicor's application was "running so slowly that it was not going to be suitable for use," it adds.

JB Hunt hits trucking software provider with $3.1 million lawsuit

Mega-carrier JB Hunt has sued transportation management system provider MercuryGate for $3.1 million — the amount JB Hunt says it’s owed as a refund for software it says failed to meet the functionality agreed upon by the two parties.

The carrier says it bought the Mojo Route Optimization Software and Carrier Management System Software from MercuryGate, planning to use them “in booking loads for delivery, identifying and tracking carriers and logistics management.” According to court documents, JB Hunt says the software “is virtually useless,” save for 1 percent of its brokerage business.

Software Procurement Problems at the Delaware State Procurement Office

GSS, the Delaware State Procurement Office, contracted SciQuest Inc. for an “out of the box” website where various state agencies could advertise open contracts, private vendors could submit bids, and the public could keep tabs on the proceedings. However, after two years only part of the site is working and GSS and SciQuest are embroiled in a legal battle over the long-delayed project.

A typical SciQuest client submits 4 or 5 enhancement requests, SciQuest said, but to date GSS had submitted 97 such requests and the project scope was out of control. The company claims to have provided the software that GSS needs, while even throwing in an additional $61k worth of software licenses for free. Delaware taxpayers could be on the hook for a nearly $2.3 million state procurement website that may never function as originally envisioned.

JDA Software Hit With Judgment in Dillard's Dispute

Dillard's sued JDA Software Group Inc. alleging i2 software failed to meet obligations regarding two software-license agreements for which the department-store operator had paid $8 million. JDA was ordered to pay $246 million in damages. The award by a state jury in Dallas included $238 million in punitive damages, which isn't meant to be compensatory but is instead meant to deter the defendant and others from engaging in similar conduct.

Warehouse management software bankrupts Porteous Fasteners

Porteous Fasteners imported and distributed construction and industrial fasteners in the U.S. and Canada. Founded in 1966 in the Los Angeles area, they grew to about 250 employees working at the head office & warehouse, 6 regional distribution centers and 9 branches. One branch was located in Vancouver, B.C.

Porteous had used a local software development company to write their own ERP system, and that had been operating for a number of years. They were importing about 100 containers per week and wanted to improve the management of goods arriving at warehouses, moving between warehouses, and being shipped to customers. This led to them selecting and implementing a new warehouse management system. Unfortunately, about a year after the new system went live, the company was bankrupt. The Porteous name and assets were acquired by competitor Brighton-Best International for pennies on the dollar.

City of Indianapolis sues Interact for dispatch system software implementation failure

Bennett Haeberle, WishTV (page no longer available)

The city of Indianapolis is suing Interact Public Safety Systems for over $8 million for emergency management software that was not implemented as promised. Interact was unable to deliver a working system almost three years after the original go-live date. As a result of Interact’s failure to properly meet its obligations, the city was forced to find an alternative vendor to replace their Legacy Computer Assisted Dispatch system. To date the city has paid Interact about $6.6 million for the software.

Food grower Woolf Enterprises sued Ross Systems over ERP misrepresentations. Ross claimed their software would meet requirements and implementation would be on time and within budget, but Woolf found costs were grossly understated. Ross had claimed the ERP could provide detailed inventory and would allow controls and yields to be optimized, but Woolf found that was not the case. Ross promised its software would meet farm cost and general ledger needs, but Woolf had to buy another module and pay for customization. Woolf had spent about $1.2 million for software and maintenance, and the suit claimed the ERP was unstable, defective and deficient.

Experts commenting on the case felt that the problem could have been largely caused by mismatched expectations on the part of Woolf. For example, Woolf's requirements were inadequate and consequently new requirements were discovered during the implementation, leading to delays and increased costs.

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